TORONTO (miningweekly.com) – London-based Antofagasta announced Friday that its subsidiary Minera Los Pelambres had agreed to transfer its 40% stake in the Alto Maipo hydroelectric project to controlling shareholder Gener in return for cheaper electricity.
Los Pelambres has been in partnership with Gener in the Alto Maipo project to develop, construct, own and operate two run of river hydroelectric power stations located in the upper section of the Maipo river, about 50 km to the south-east of Santiago, with a total installed capacity of 531 MW.
In October last year, the companies announced that they expected the project, which is to provide 110 MW to the Los Pelambres mine under a 20-year power purchase agreement, would incur a cost overrun of 10% to 20%. At that time, Antofagasta also pointed out an expected significant decrease in long-term energy prices in Chile, resulting from the growing contribution of solar and wind power generation.
Antofagasta initially became involved with the hydropower project to ensure that Los Pelambres would be able to access a reliable source of electricity at competitive prices.
“The company is now close to fulfilling this objective at an improved price and to ensure a clean, stable and long-term energy supply for Los Pelambres,” commented the Antofagasta CEO Ivan Arriagada.
Antofagasta said the carrying value of Los Pelambres’ share of the project was valued at $356-million.